Steve Coggeshall of ID Analytics says fraud analytics “have to be incredibly clever at finding these unusual patterns in the midst of all this background clutter."

Last year more than 8 million Americans were victims of identity fraud, in which crooks used the victim’s personal information to apply for bogus credit cards or purchase expensive gadgets on credit.

It seems like a hard problem for the bank or merchant to spot in real time — before the victim’s credit rating is destroyed and the credit card issuer eats a big loss.

Yet a cluster of San Diego-area companies have developed technology that attempts to stop ID thieves and other credit fraudsters before they get started.

And they do it with math.

Or more specifically, math-based formulas called algorithms that mine giant data bases looking for patterns associated with fraud.

ID Analytics, FICO, SAS and Opera Solutions are among the firms with beachheads in San Diego working on fraud analytics, a subspecialty in the giant data analytics field.

While San Diego has a core group of companies working on general business analytics — such as mining data to improve website traffic or target Web advertising — fraud is where the region really dominates. About 65 percent of all credit card transactions worldwide are scored for fraud risk using FICO’s analytics software products. FICO is based in Minneapolis. But its fraud analytics team operates out of Carmel Valley.

ID Analytics, which is based in Carmel Mountain, is the market leader in scouring credit applications for clues that the people applying are who they say they are.

SAS operates a group in San Diego that builds analytics systems that compete with FICO in scoring credit card transactions for fraud risk. Opera Solutions offers analytics that pinpoint which credit card customers are most likely to walk away from their bills. It also makes cyber security analytics systems.

And Global Analytics built fraud software for a major credit card company that predicts which cards are mostly likely to be compromised after massive data breaches. If the credit card company had to replace every card after every data breach, the cost would be very high, said Michael Thiemann, chief executive of Global Analytics. Using the software that Global Analytics built allows the credit card company to pinpoint which cards are at greatest risk of fraud.

Almost all of these local fraud analytics firms have roots in HNC Software, which was purchased by FICO in 2002 for $810 million. Several HNC executive and scientists left after the FICO deal to start their own firms.

“In San Diego, we view ourselves as a hub for analytics,” said Joe Milana, head of global analytics for Opera Solutions. “But the most successful product that HNC developed was in fraud detection. So there’s a greater specialty in fraud going back to the origins of HNC.”

The mathematical formulas to uncover fraud are complex — many of them are pieced together by Ph.D. level scientists. They do, however, have some things in common.

“They have to wrap around very large volumes of data,” said Steve Coggeshall, chief technology officer for ID Analytics. “They have to be incredibly clever at finding these unusual patterns in the midst of all this background clutter. And they also have to work very fast, because we’re doing this in real time.”